Warmland Specialty Food Cooperative

Date of Incorporation: January 2002

Membership: 8

Activity: The co-op is a not-for-profit organisation that is working on providing a common kitchen, which is federally certified, for members to produce value-added food products.

Organizational Form: Food processors' co-op (not-for-profit)

Area Served: Cowichan Valley, British Columbia

Background

There are close to 770 farms in the Cowichan Valley area¹ and, according to recent provincial statistics, close to three quarters of farmers earn less than $18,000 per year. A number of small producers in the region recognize that engaging in value-added business opportunities, such as producing canned goods from agricultural products, or processing raised meat such as chickens or emus, would offer an opportunity to increase their income. Farmers are often already heavily capitalised and carry large mortgages. For some farming is a way of life, and for others it is mostly a hobby. For these reasons farmers are not likely to abandon their current farming commitments; it is also improbable they would be willing or able to take on even greater levels of debt. What many local farmers are interested in is the development of value-added agrifood activities.

The process of developing the Warmland Specialty Foods Co-operative (WSFC) began with the Agricul­tural Survival Forum that took place in Duncan, B.C. in 1998. This event brought together the operators of small farms in the Cowichan region to discuss their needs and concerns. This meeting identified that there was a need to carry out value-added activity in the agricultural sector in the Cowichan region, not only to increase the worth of local products, but also to develop new business opportunities for producers. The fact that there was no local processing facility (which conformed to stringent regulations of the Canadian government's Hazardous Assessment Critical Control Points (HACCP)² guidelines) was a considerable concern for local producers.

Following the Agricultural Survival Forum the Cowichan Community Futures Venture Centre (CCFVC) undertook a feasibility study to examine the issues identified at the meeting. This study aimed to assess the potential for establishing a co-operative for agricultural producers to develop value-added production facilities. The report concluded that there was significant interest in the concept of a value-added co­operative that offered opportunities to food producers in the Cowichan Region.

Establishing the Co-operative

The Warmland Specialty Foods Cooperative received a great deal of assistance from the Community Futures office, which helped with the preparation of funding proposals, keeping track of the expense accounts, organising meetings, as well as providing countless hours of administrative assistance. Without the CCFVC assistance, particularly the work of Louise McMurray, members of the co-op feel that they would not have made it through the initial stages of development. The co-operative received a $50,000 grant from the B.C. Ministry of Community Development, Cooperatives and Volunteers, through the Community Kitchen project, to assist with initial consulting and administrative expenses. Warmland also received a Targeted Wage Subsidy³ from the Federal Government to fund the start-up wage of the co-ordinator for 13 weeks.

The co-operative model was selected for a number of reasons. The co-op founders decided that establish­ing a group as the basis for production would provide each member with the support to see their product through to the marketplace in a value-added form, allowing them to retain the extra dollars earned from such undertakings. A co-op could also provide the producer with economies of scale normally reserved for large operations. Working as a centralised group would provide credibility and quality standards that would allow access to markets open only to those associated with large, well-established businesses. As well, the co­operative model would facilitate the development of strategic partnerships and alliances among producers throughout the region.

An additional incentive for working within a co-operative framework was that it could provide the opportu­nity to create facilities that met federal regulations concerning food production, in particular the demanding Federal HACCP guidelines. There are currently no facilities on Vancouver Island that meet these standards and the costs of creating a facility that would do so is prohibitive (in the range of half to one million dollars) for any single investor. However, without this kind of facility in place, there are limits to the scope of value-added ventures that can be taken on. Those interested in establishing and operating such a facility in the Cowichan Valley decided that the best way to achieve this goal would be through the co-operative model.

Although the idea of setting up a community kitchen food processing facility appealed to a number of producers in the area, not everyone was as keen to do the legwork necessary to establish the facility. Most individuals were inclined to adopt a wait and see attitude; to watch how the process went, rather than to become involved in the early stage, when the future was still unsure. Louise McMurray commented: "Ev­erybody wants to be in once the thing is up and running and the process is in place. But I think [the co-op] struggled to find people that were going to do the work to get it to that point" (Louise McMurray, CCFVC, 2001).

A small group of people however did volunteer many hours and together they worked through the process of establishing the co-operative; in January 2000 the Warmland Specialty Foods Cooperative was incorpo­rated.

Developing a Vision

Warmland Specialty Foods Co-op is working toward the establishment of a federally certified food produc­tion facility and services that will provide support to new businesses wishing to enter the value-added food market. It aims to help sustain, enhance and expand older established retail outlets with top quality products, creating a local and unique flavour for Vancouver Island.

The co-op's intent is to provide an opportunity for economic growth and development in the Cowichan Valley area, particularly for the agricultural sector⁴ and for entrepreneurs who want to develop products for the food industry. The co-op also envisions an educational component that could provide nutritional coun­selling and training in food preparation to the broader community. With this vision in mind the co-op has identified a series of short and long-term goals

1. To establish a federally certified secondary food processing facility in the Cowichan Region that will meet the needs of new start-up ventures in the food industry.
2. To develop the infrastructure that will provide access to the tools required for every phase of the business development from market research to recipe creation, to business plan development, access to certified commercial kitchen and processing facilities, food training, and marketing ser­vices.
3. To provide an opportunity for farmers to supplement their incomes through the sale of value-added food products.
4. To work with farmers and agricultural organisations to identify and promote new opportunities for growing products.
5. To have as a long-term goal the development of a highly visible agri-tourism processing and retail facility on Vancouver Island for producers who have outgrown the existing Cowichan Community Centre kitchen facilities.

Some of the anticipated benefits of these goals are the following: the concrete move toward local sustainability, increasing the economic base of the Cowichan area, and recognition of the work of agrifood producers in the area.

The co-op will evaluate its success by measuring at least the following:

• The increase in new business start-ups related to food.
• The expansion of existing food related businesses and the increase in the number of jobs.
• The revitalisation of local agricultural lands.
• The opportunities available for the development and marketing of unique products such as regional food specialties, specialty fish products, traditional First Nations foods, and processed forest botanicals.
• The opportunities – in the short-term – to move more locally produced and value added foods into local markets – and in time – to export products beyond the region to other places in the province, Canada, and beyond.

The Warmland Specialty Food Cooperative is also interested in increasing the self-sufficiency of the region, and members are convinced that supporting local agrifood producers is an important component of this
objective.

Self-sufficiency in the form of food security is becoming increasingly important to the Cowichan Valley and indeed all Vancouver Island residents. Earthquakes are not uncommon in the area; an earthquake of a large magnitude is a real concern, and one that residents are frequently reminded to prepare for. Natural hazard experts forecast that incoming transportation routes would be severed for a time in the event of an intense earthquake. As it is now, this means that nearly all of the area’s food supply would be cut-off as it comes from areas off Vancouver Island. Residents were struck by this fact when, in December 1996, an unprecedented snowfall virtually shutdown the southern part of Vancouver Island. They realised that the island’s food supply would be exhausted in three days. In light of this experience, and in preparation for future ‘natural hazards’, members of Warmland believe that another strong argument for the expansion of locally produced goods for storage is that it would help to alleviate the effects of the aftermath of a natural calamity.

The Co-op in Action

The co-operative has brought together a remarkable experience of food producing, processing and culinary expertise, as well as proficiency in business skills. For example, WSFC has hired a kitchen co-ordinator
who is a French-trained chef, formerly employed at the Ritz Hotel in Paris.

The co-op’s board of directors consists of four members and the kitchen co-ordinator, who is the only paid staff person at this time. The level of activity of the members varies; at this time two people carry out most
of the work.

Services that WSFC now offers include the use of a provincially inspected commercial kitchen; support in business and market planning; training in safe food handling; bulk buying discounts; the opportunity to
market top line products under the Warmland Gourmet label with bar code facility; distribution networks; a comprehensive website that provides information about the co-op and member services, and online marketing services;5 and the opportunity to participate in and have professional representation at trade shows and events.

Warmland Specialty Food Cooperative has developed the logo, brand, office stationary, product labels, promotional material and other materials of trade show presentations for the the Warmland Gourmet
product line. It has also developed the e-business services.

Skill development for the co-op board, members, and staff has been an important activity for the co-op.  Skills training has included: Food Safe handling training; HACCP training; marketing and business plan

development; exporting agrifood products; internet and e-business, and market research. The co-operative has facilitated Food Safe courses in the community, and hopes to carry out more ambitious educational courses in the future, perhaps in co-operation with the high school.

WSFC has hosted day-long training seminars for 25 Vancouver Island processors, including four workshops sponsored by the Ministry of Agriculture and organised by the co-op on developing a business plan,
marketing your product, labels, packaging, and regulatory concerns in food production.

The co-op achieved first runner up for best product booth at the Venture Showcase in Duncan (February 5, 2001), which is noteworthy considering all its products were developed within the three preceding months. The Warmland Co-op has business relations with the Cowichan Regional Fishers’ Co-op, and sells its products in the fish market as well as in a number of other local businesses. On occasion, the co-operative will hire the staff from Lunch on Clements, a restaurant in Duncan that provides employment for people living with disabilities, for short-term jobs, such as peeling garlic. Since the co-op started creating its products
in November 2000, it has been able to sell its total production. The co-op has purchased a high-end blender/processor for liquefying sauces, which complements the equipment on loan from various members, and it has lined up several prdocuers dedicated to supply products for the upcoming harvest season.

WSFC has become a leading community participant in support of the development of value-added microenterprises. Several retail stores are taking on more products for sale and one specialty gift basket business
will expand services with this product line. In addition to serving the local market, these products provide visitors and tourists with unique items from the Cowichan Valley area and, if passed on as gifts, encourage
others to visit the area.

As a result of the activities of the co-op, there is an increased demand for the growth of local produce, specifically organic garlic and a variety of hot peppers, sweet peppers, onions, eggplant, and tomatoes, to name a few. The Cowichan Region has exceptionally fertile soil and weather warm enough to grow a wide variety of crops - the possibilities are endless! Also, there seems to be a growing interest in making the area
a Genetically Modified Organism free environment. As the sales of existing products increase, the demand for fresh produce will be extended to farmers located elsewhere on Vancouver Island.

Limits to Growth

The co-operative is having difficulty finding an appropriate or adequate facility for its current activities. It has access to the kitchen at the Cowichan Community Centre in Duncan, but unfortunately the facility is set up for restaurant services rather than for the production of food for storage. A kitchen facility that is set up to do high-volume canning, something that is not typically done in a restaurant, would help some co-op members immensely.

At this time, the co-operative does not have the financial resources to acquire the equipment needed for its current production of bottled sauces and spices, let alone acquire a HACCP approved facility. Members of
the co-op believe the ideal facility would provide the premises and the equipment enabling separate processing of fruit and vegetables, poultry, fish, and meat. Considering the different food types it is necessary to be able to completely disinfect a processing area.

Co-op members feel that the work that they are doing is contributing to the larger goal of a federally approved processing facility in the region. What is needed is the co-operation of government which, they feel, should be interested in helping make possible a venture that could provide economic development and sustainability to the region, while utilising the resources and skills already in the community. Founding member, Godfrey Ferguson believes that capital investments by the government would result in it realising significant returns on its investment. He feels that if the government makes rules, such as for food processing, it should then also assist in making it possible to achieve the outcomes the rules are projecting:

If we want a co-operative movement it has got to be co-operative, not only among the people, but it has got to be co-operative with government as well. Government, again in their great wisdom, has brought in rules, which are important – I don’t want to have any one sick from my great hot sauces.

They have to not only put in the constraints but [they have] to help people find a way to meet the requirement of the constraints.” (2001)

The experience of the Warmland Specialty Food Co-op has demonstrated that perseverance of efforts and re-evaluation of circumstances are key components of co-op development. In its first year the co-op grew significantly and accomplished a number of its objectives. By overcoming difficulties and surviving the coop has been able to fine-tune itself, and has demonstrated its worth and sustainability for economic enhancement
in the region. When one path of organisational growth was not working, the group revisited its business plan and developed a new course of action based on the available resources, yet keeping sight of their more ambitious goals, which may be farther off than originally anticipated.

Ferguson reflects: “It’s like the Wright brothers with their aircraft – we’ve gone down the runway, come off the ground about a hundred
feet and had to come back down again, do a little taxiing, get up a bit higher, and run a little further with it”(2001).

Individual producers and processors have different requirements. The co-op was challenged in its first year of operation because of its desire to create a flexible and creative organisation that can meet the varied
needs of existing and potential members, and also to be an enhancement to the community at large.

The co-op now enjoys the co-operation of all levels with respect to the use of the kitchen facility at the Cowichan Community Centre, however there is still no suitable facility to accommodate the Warmland Specialty Food Co-op’s needs. Food processors and farmers, who are looking seriously at developing value-added products for resale and export, must be able to access a federally certified kitchen facility as well as meet B.C. regulations. The range of food processing activities at the micro-processing level requires a facility that is specifically designed to meet the HACCP requirements for multi-purpose usage. This has always been identified as the long-term goal for the Warmland Specialty Food Cooperative. The reality of interim measures of using existing commercial kitchen facilities is less than satisfactory.

Ferguson has a sober assessment of how the co-op can move toward this goal.

I would say one step at a time. First you crawl before you walk, walk before you run. I would see us, if we succeed, crawling for one heck of a long time…I don’t think there is enough brains in government to see the value of what we are doing. I don’t have the confidence in government [to see it through] and that is a terrible thing, but I feel that is the situation (2001).

The Warmland Specialty Food Cooperative is providing the initial legwork to establish a sense of the need in the community for this facility. It has also developed the organisational framework upon which to build an expanded network of agricultural producers and processors to bring this dream a little closer to reality. All that seems to be required to get this project off the ground and to meet the goals of economic sustainability is financial support.

1. The Cowichan Valley is located on the southeastern part of Vancouver Island, which lies off the coast of the mainland of British Columbia, Canada.
2. For further information please see www.dnv.com/certification/Services/haccp.htm
3. For more information please visit www.hrdc-drhc.gc.ca/hrib/sdd-dds/odi/content/TWS.shtml
4. The primary inputs would be the raw food products from the local farming community.
5. www.warmlandgourmet.com

Case Study Information

Researcher: Lloy Wylie
Date of research: 2001
Author: Lloy Wylie
Date of writing: 2001/02
Editing: BCICS editorial team
Supervision: Kathleen Gabelmann, BCICS Research Co-ordinator

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